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What liquidity developments are to be expected in Germany?

How should the economic and financial situation of companies in Germany be assessed during the corona crisis? And what does this mean for your own customer (and supplier) portfolio?
Blog Post

At first glance: positive

The current economic situation should be considered as positive. There are still hardly any bankruptcies taking place even though the postponement of the obligation to register insolvency has expired. Companies are taking on new staff again, the automotive sector is reporting excellent sales figures, especially in China, and mechanical engineering has also picked up.

Is this appearance deceptive? That depends on where you look.

In various sectors there are extreme supply shortages. This is most evident at the moment in the building industry; material is scarce for a variety of reasons, which is driving up prices and leading to increases in building time. This is good for those building contractors and tradesmen who had sufficient liquidity to be able to stock up on materials in good time.

Such a situation generates risks: what does it look like in terms of prices offered and agreed time plans? Will this result in losses and penalties? What about pre-financing? How long can tradesmen afford this?

Price increases lead to inflationary trends. These then cause higher interest rates for loans. For some companies these could be critical developments. Supplier credit becomes an important financing instrument.

There is also a supply shortage in the chip sector. This could slow down both the automotive industry and mechanical engineering. Their suppliers will then also feel the effects.

Generally speaking, short-time working allowances are still flowing in abundance in some sectors. It will be interesting to see how the labour market develops when these subsidies expire and whether there is an effect on consumption.

The long-term losers of the crisis: hotels, restaurants and tourism

Especially in the hotel and restaurant industry, many companies are only surviving because their accountants have been busily making applications for corona support. It will become interesting when these possibilities end. This is currently planned for the 30th September 2021.

As before, the tourism industry is especially affected by corona. With the hectic changes in restrictions that the politicians come up with almost every week, customers are very reluctant to travel despite all the marketing measures. This is especially true for long-distance travel. The death of restaurants and pubs will happen quietly in many places: many of these businesses are run by sole traders who will simply shut up shop.

What it clearly visible, on the other hand, is the growing rate of empty business premises in our city centres. Apart from restaurants, the retail sector, especially textile retailing, is particularly worthy of mention here. Customers lost to online shopping are difficult to win back. This situation will have knock-on effects for property owners.

Rising energy costs put pressure on finances

Our energy costs will rise sharply due to the CO2 tax. This will not only have an impact on private households, where people will certainly have to cut back on spending in the future. In industry and trade, too, work must be done to ensure that international competitiveness is maintained despite rising purchase prices.

It also remains to be seen how credit insurance limits change after the state protection umbrella for this sector in Germany expired on 30th June.


There will be winner and loser industries. Suppliers who have the latter in their customer portfolio are now forced to pay particular attention to changes in payment behaviour: the first important signs of a change in the company's financial situation.

Especially at the turn of the year, it will be necessary to observe one's own customers particularly closely because of the economic developments.

From the perspective of credit management this means loosening limits where industries are doing well and clients have sufficient liquidity to make advance payments. In contrast, in industries where there are still problems particular alertness is still required. However: we should look optimistically into the future and grasp all the possible opportunities.